This website uses information gathering tools such as cookies and other similar technologies. By clicking 'Accept' on this banner or by using this website, you consent to the use of cookies unless you have disabled them. If you do not consent, do not use this website. It is at your, the user's, discretion to proceed with accessing this website. For more information, read the "Cookie Policy" under Online Privacy Policy.This website uses cookies..

This website uses information gathering tools such as cookies and other similar technologies. By clicking 'Accept' on this banner or by using this website, you consent to the use of cookies unless you have disabled them. If you do not consent, do not use this website. It is at your, the user's, discretion to proceed with accessing this website. For more information, read the "Cookie Policy" under Online Privacy Policy.

Accept

This website uses information gathering tools such as cookies and other similar technologies. By clicking 'Accept' on this banner or by using this website, you consent to the use of cookies unless you have disabled them. If you do not consent, do not use this website. It is at your, the user's, discretion to proceed with accessing this website. For more information, read the "Cookie Policy" under Online Privacy Policy.This website uses cookies..

This website uses information gathering tools such as cookies and other similar technologies. By clicking 'Accept' on this banner or by using this website, you consent to the use of cookies unless you have disabled them. If you do not consent, do not use this website. It is at your, the user's, discretion to proceed with accessing this website. For more information, read the "Cookie Policy" under Online Privacy Policy.

Aarvee Denims & Exports Ltd Management Discussions.

ANALYSIS

DISCLAIMER

Statements in the Directors Report & Management Discussion and
Analysis describing the Companys objectives, projections, estimates, expectations or
predictions may be "forward-looking statements" within the meaning of applicable
securities laws and regulations. Actual results could differ materially from those
expressed or implied. Important factors that could make difference to the Companys
operations include raw material availability and its prices, cyclical demand and pricing
in the Companys principle markets, changes in Government regulations, tax regimes,
economic developments within India and the countries in which the Company conducts
business and other ancillary factors.

Overview of the Economy

During 2017, the global economy began its journey with estimated global
economic growth of 3.8%. During second half of the year 2018, this rate of development had
gradually declined due to US-China trade war tensions and weak economic situation in some
developed countries.

The Indian economy closed fiscal year 2018-19 with a real GDP growth of
7.3%. India continues to be one of the fastest growing major economies in the world and is
expected to be among the worlds top three economic powers in future.

Overview of Indian Textile Market

Indias textile industry is one of the largest contributors to the
economy accounting for around 4% of GDP. The growth of textile sector is largely depends
on consumer spending and multiple factors like actual and perceived economic condition,
disposable income and employment. The textile industry overall, is going through tough
times due to structural transformation after GST and due to the weak market position in
the domestic as well as export markets. The coupled with low cotton production and
increased prices, is putting pressure on prices and margins.

Review of Operations

(Rs. in Lakhs)

Particulars

Year ended 31.03.2019

Year ended 31.03.2018

Revenue from Operations

75434.03

82,959.72

EBITDA

8500.12

8277.93

Profit after Tax

143.75

564.80

Earnings per Share (Rs.)

0.46

2.39

Revenue

There has been a decrease in Revenue from Operations by around 10% to
Rs. 75434 Lakh mainly due to slower demand and oversupply situation of the textile
products in the markets.

EBITDA & PAT

EBIDTA had increased to Rs. 8500 Lakh from Rs. 8278 Lakh during
previous financial year on account of reduction in costs - other expenses. However Profit
after Tax (PAT) was down to Rs. 144 Lakh from Rs. 565 Lakh during previous financial year
due to higher interest expenses on account of increase in working capital cycle.

Raw Material Consumption

Average cotton prices during the year under review were higher by
almost 10% as compared to previous year. Hence Cotton consumption cost had increased to
Rs. 30105 Lakh from Rs. 29594 Lakh during previous financial year despite reduction in
overall production and sales during previous financial year.

Finance cost increased by 13% to Rs. 4930 Lakh from Rs. 4346 Lakh
during the previous year mainly due to increase in average interest rate and utilization
of high cost funds instead of low cost funds.

Other Expenses

Other expenses decreased by 4% to Rs. 18276 Lakh as compared to Rs.
19036 Lakh during previous year mainly due to cost cutting measures taken by the
management in overall manufacturing as well as administrative expenses. Store and Spares
consumption have considerable decreased to Rs. 1078 Lakh from Rs. 1830 Lakh during
previous year. Other major expenses like labour cost, job work cost, packing material cost
have also been considerably decreased during the year under review as compared to previous
year.

Working Capital

Working capital requirement in the business went up post GST
implementation garment manufacturers and in turn dealers struggled to cope up with new tax
regime.

Subsidiary Company

During the year ended March 31, 2019 the subsidiary company has not
started its commercial operations and therefore no Statement of Profit and Loss has been
prepared for such subsidiary for the year ended March 31, 2019. On account of above,
standalone and consolidated financial results of the company for year ended March 31, 2019
remains same. However, Consolidated Financial Statements of Assets and Liabilities as at
March 31, 2019 of the parent company after incorporating Financial Statements of Assets
and Liabilities as at March 31, 2019 of such subsidiary has been prepared.

The board of directors of the company in its meeting held on 10.08.2019
has approved the striking of its wholly owned subsidiary company named M/s. Aye Ess
Spinning Mills Private Limited, Ahmedabad.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has appropriate internal control systems for business
processes, with regard to efficiency of operations, financial reporting, compliance with
applicable laws and regulations etc. All operating parameters are monitored and
controlled. Regular internal audits and checks ensure that responsibilities are executed
effectively. The system is improved and modified continuously to meet with changes in
business conditions, statutory and accounting requirements. The Audit Committee of the
Board of Directors actively reviews the adequacy and effectiveness of internal control
systems and suggests improvement for strengthening them, from time to time.

RISK AND CONCERNS

The Company is exposed to specific risks that are particular to its
business and environment within which it operates, including Foreign Exchange Risk,
Interest Rate Risk, Commodity Price Risk, Risk of Product Concentration and other Business
Risk. While risk is an inherent aspects of any business, the Company is conscious of the
need to have an effective monitoring mechanism and has put in place appropriate measure
for its mitigation including business portfolio risk, financial risk and legal risk and
internal process risk.

HUMAN RESOURCES DEVELOPMENT / INDUSTRIAL RELATION

The Company rely that the health and safety of the workers and the
persons residing in the vicinity of its plants is fundamental to the business. Commitment
to the identification and elimination or control of the workplace hazards for protection
of all is utmost importance. The manufacturing operations are conducted to ensure
sensitivity towards the environment and minimize waste by encouraging "Green"
practices. The Company continued to enjoy healthy industrial relations during the year.

CONCLUSION

Business environment for Textile Industry where your company operates
remained highly volatile in recent past and its adverse impact decayed performance of the
company. Traditionally textile Industry has more or less remained outside the purview of
indirect taxation. Implementation of GST led to a significant disruption in the highly
unorganized sector which prevailed much longer than expected. In spite of lots of
challenges like introduction of new tax regime, sluggish export as well as domestic market
and high volatility in the prices of raw materials, the performance of the company was
satisfactory. By implementing cost effective measures and aggressive marketing strategies
the company will achieve further improvement in its performance and serve the
stakeholders in a way ahead.

To conclude, the performance of the company during the year 2018-19
remained at satisfactory level.

"Prevent Unauthorized Transactions in your demat / trading account Update your Mobile Number/ email Id with your stock broker / Depository Participant. Receive information of your transactions directly from Exchanges on your mobile / email at the end of day and alerts on your registered mobile for all debits and other important transactions in your demat account directly from NSDL/ CDSL on the same day." - Issued in the interest of investors." | "KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary." | "No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."

www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.

You are not allowed to download same report on single day

Terms & Conditions

By clicking on submit button, you authorize IIFL & its representatives & agents to provide information about various products, offers and services provided by IIFL through any mode including telephone calls, SMS, letters etc. . you confirm that laws in relation to unsolicited communication referred in National Do Not Call Registry as laid down by Telecom Regulatory Authority of India will not be applicable for such information/ communication.